Trade groups: chancellor could have done more for transport industry

Transport industry trade associations have offered a lukewarm reaction to the chancellor George Osborne’s autumn statement – noting his reiteration that fuel duty will remain frozen for the rest of the parliament, while simultaneously lamenting his failure to cut duty, or to offer funding to help the haulage industry recruit much-needed new drivers.

Karen Dee, director of policy at the Freight Transport Association (FTA), said: “Falling global oil prices have delivered significant reductions in fuel prices recently.  While this has provided some welcome relief to operators struggling to keep goods moving in the busy Christmas period, it has also put prices close to the point at which fuel duty increases would be triggered.

“The chancellor should be congratulated for resisting the temptation to raise some additional revenue at the expense of the freight industry and other road users.”

But she added that FTA was: “disappointed that the chancellor did not go further and cut fuel duties. Independent research has demonstrated that this could deliver a further boost to the UK economy and we will continue our efforts to persuade government to take action.”

Likewise the Road Haulage Association (RHA) expressed disappointment: “that the chancellor has not seen fit to make the long-called-for three pence per litre cut in fuel duty – a cut desperately needed to maintain the viability of UK hauliers.”

RHA chief executive Richard Burnett said: “Diesel represents more than a third of a haulier’s costs and UK fuel duty is the highest in the EU. Because of this our European counterparts are operating at an unfair advantage.

“A three pence per litre duty would have gone some way to levelling the playing field between the UK and the rest of Europe and would have represented a 3-4 per cent reduction in costs to the haulier, enabling them to be more competitive.

“Today’s freeze means that as a result of today’s low oil price, fuel duty now accounts for nearly 70 per cent of the price of a litre of fuel.

“Another freeze will, for many, be seen as little more than a delaying tactic. UK hauliers have to watch every penny; they can’t afford not to.

“This is an industry where any increase in the price of fuel or the rate of fuel duty has to be passed on to the customer – ultimately increasing prices for business and consumers alike. And if customers won’t pay, there is a real threat to the survival of the business.

“Despite the optimism shown by the chancellor in this, the final autumn statement of the present government, the UK’s economic recovery remains vulnerable. The Road Haulage Association, together with its campaign alliance partners FairFuelUK, will continue to push for a fuel duty cut. RHA-commissioned research by NIESR shows that a cut in fuel duty is good for growth and will create jobs.”

FTA, which is also a supporter of FairFuelUK, added that: “as a result of the campaign, fuel duty is now at a far lower rate than it would have been, saving the logistics sector £4.44 billion in extra duty had increases been introduced.”

Meanwhile, both associations again highlighted the driver shortage, and the lack of funding available from the Treasury to improve recruitment. Both had lobbied the chancellor on the issue prior to his autumn statement – and the RHA said that in failing to offer investment in driver training, the government had missed a huge opportunity to help boost the industry.

Said Richard Burnett: “The RHA and our members, including many of the industry’s larger firms, could not have been clearer. We face a serious and worsening shortage of lorry drivers, which is already holding back growth, and significant government funding is needed to reverse that.

“This is fast becoming the biggest issue that the road haulage industry has ever had to cope with. There is a 45,000 driver shortage now, 35,000 drivers are due to retire within the next year, and only 17,000 drivers are joining the industry.

“The opportunity was there to end the long trend of under-investment and wholesale reliance on bringing in drivers from Eastern Europe.

“We were very clear that funding would change industry behaviour and that the government could lead that, as part of a package of measures to strengthen recruitment from the UK.

“30 months ago, the logistics sector skills council identified the lack of funding as a key reason why we would soon have a serious driver shortage. Funding is readily available in many other, less vital sectors of the economy, with a limited level of availability for training lorry drivers, which is inaccessible and wholly inadequate.

“We put forward a targeted solution to a real problem, with massive support from the industry. It is very disappointing that the government has turned a deaf ear.”

RHA said it would be promoting the industry with Jobcentre Plus and others in the coming months, but said its efforts would be less successful without Treasury support.

FTA’s Karen Dee added: “The logistics industry is suffering a chronic shortage of drivers, which is adding further pressure at the busiest time of year.  But this problem will extend beyond Christmas and it is essential that government works with the industry to encourage skills development within the sector and to identify innovative ways to incentivise the uptake of vocational training.”